If you have had your Medigap plan for a while, you may have noticed that your monthly payment has increased even though nothing about your coverage has changed. So why are you suddenly paying more for the same plan?

Below, this Medicare Supplement agency in Wanatah, Indiana is going to explain what’s causing your Medigap prices to rise.

Why is your Medigap bill higher even though nothing changed?

It can feel unfair when your Medigap premium increases even though your plan looks the same. But these increases don’t happen for no reason. Medigap typically increases each year and it is a normal part of how the system works.

One main reason is the increasing cost of healthcare. Hospitals, doctors and other medical services charge more over time because of inflation and higher costs to deliver care. Insurance companies must keep up with this, which is why they adjust their premiums.

Your age and the way your insurance company prices its plans can also be a factor. Even if you have not seen your doctor more often this year, other people in your plan group can be using more care. When that happens, the overall cost of the plan increases and that usually shows up as a higher premium on your bill.

How does your plan’s pricing work?

There are three main ways insurance companies set prices. Some plans are community-rated, which means everyone pays the same price. These rates can still increase due to inflation or higher medical costs but not simply because you are getting older.

Others are issue-age-rated, where your price depends on your age when you first bought the plan. The younger you were, the lower your starting price. These plans don’t increase because of age either but they can still increase with inflation or changes in the cost of care.

Then there are attained-age-rated plans. These are cheaper when you are younger but your premium increases as you age. Over time, they can become the most expensive type.

Are you not sure which type you have? Talking with your local Medicare Supplement agency in Wanatah, Indiana is the best way to understand which pricing method your plan uses, and what that means for future costs.

What do rising healthcare costs have to do with your Medigap premiums?

Every year, the cost of healthcare continues to rise. Doctors, hospitals and labs raise their prices. New treatments and medicines come out and most of them cost more than before. All of that eventually affects Medicare and then it trickles down to Medigap plans.

So even if you are not using your coverage more than you did last year, the cost of providing that coverage is probably higher. That is one of the main reasons your Medigap premium might increase.

Why do prices rise as everyone in your plan gets older?

Every Medigap plan is part of a larger group comprising all individuals who have that same plan. As time goes on, that group gets older and people start using more healthcare. When that happens, the insurance company must pay more in claims and those higher costs can lead to higher premiums for everyone in the group.

If the plan stops bringing in new members, the prices can increase even faster. Without younger, healthier people joining, there is no balance to offset the higher medical costs of older members.

What can you do if your Medigap premium keeps increasing?

You are not stuck with your current plan forever. If your premium keeps increasing, you can look around and compare what other companies are charging for the same coverage. Sometimes you will find a better deal and switching could save you real money.

The important thing is knowing when you can switch easily and when you might have to answer health questions. The timing can be important, so it is helpful to consult with a professional. A knowledgeable Medicare Supplement agency in Wanatah, Indiana can guide you through this process and make sure you don’t lose coverage while changing plans.

Looking for a Medicare Supplement agency in Wanatah, Indiana?

Just because your Medigap price increases, it doesn’t mean you’re out of options. If you want to lower your costs or change your plan, you can always reach out to a trusted Medicare Supplement agency in Wanatah, Indiana. At Senior Care Insurance Services (SCIS), our agents can help you compare options and switch when it is ideal. Contact us today to schedule an appointment.